A snapshot of a typical “before and after” transition to a retirement home simplifies the key points about this major life-change. Before the move, the equity in your home is tied up in the home and is not considered liquid. Unless there is a Home Equity Line of Credit or a reverse mortgage on the home, the equity is fully intact. This maximizes the funds available for downsizing to a retirement home. Let’s look under the covers a little more.
The major expenses you face with a traditional home are:
- Accommodation expenses
- taxes
- maintenance
- insurance
- utilities
- decorating
- Meals/food
- Other
- Personal care & Clothing
- Medical/Prescriptions/Health Insurance
- Telecommunications
- Discretionary spending
Vacation
Travel
entertainment
hobbies - Transportation
Car/Transit/Cabs - Gifts & Charity
There are few key difference after you transition to a retirement home.
Your equity is now in “liquid” form and is accessible as your expenses change.
All of your expenses increase since you are paying someone else for all of the costs associated with your new residence. The above diagram provides a simple view of your expenses on Day One of retirement home living, assuming you are in good health. Of course, your ongoing costs climb as your need for care becomes a key expense.
You are welcome o comment below with your thoughts on transitioning to a retirement home.
You may notice some Canadian spelling in these posts. The words may look odd but that’s how we spell them. We’re used to it.
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Author:
Unless otherwise credited, all posts are happily authored with a quill pen …
Paul Ferri, Broker, ASA (Accredited Senior Agent)
RE/MAX Unique Inc. Brokerage*, Toronto, Canada
*Each office independently owned and operated.
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